2. Decision Making process Identifying a Problem: Identifying Decision Criteria: Allocating Weights to the Criteria: Developing Alternatives: Analyzing Alternatives: Selecting an Alternative: Implementing the Alternative: Evaluating decision Effectiveness:

3. Identifying a problem Every Decision start with a problem. Swedish college students need new computer for lab because their old ones are not perfect working and increase number of computer. Now we have a problem purchase new computer.

4. Identifying Decision Criteria First of identified a problem, he or she must identifying the criteria that are important or relevant to resolving the problem. So administration decides after careful consideration that Memory and Storage Capabilities Battery, Warranty, display Quality.

5. Allocating Weights to the Criteria Memory Storage 10 Battery Life 8 Carrying Weights 6 Warranty 4 Display Quality 3

6. Allocating weights To The Criteria Memory storage B/L W Display/Q HP 10 3 8 5 Dell 10 7 6 10 Apple 8 7 8 7

7. Developing Alternatives The forth step in the decision-making process requires the decision maker to list alternatives that could resolve the problem.

8. Analyzing Alternatives Memory storage B/L W Display /Q Total HP 100 24 32 15 171 Apple 80 56 32 21 189 Dell 100 56 24 21 201

9. Selecting Alternatives The six step in the decision-making process is choosing the best alternative or the one that generated the highest total. So best alternatives is Dell. So administration decided to purchase dell computer.

10. Implementing the Alternative In the decision making process, after assessment all feature select best alternative is Dell computer. So purchase the Dell computer.

11. Evaluating Decision Effectiveness The Last step in the decision-making process involves evaluating the outcome or result of the decision to see whether the problem was resolved. If the evaluation shows that problem still exists, then administration needs to assess what went wrong.

12. Strategic Management process Identifying the Organization's Current Mission, Goals, and Strategies: Doing an External Analysis Doing an internal Analysis Formulating Strategies Implementing Strategies Evaluating Results

13. Identifying the organization current Mission, Goals, and Strategies Every organization needs a mission a statement of its purpose. Defining the mission forces managers to identify what it’s business to do. In this step organization set the current mission, goals and strategies.

14. Doing an External Analysis Analyzing the external environment including all competitors, distributers, buyers, suppliers,Location, demographic, Political/Legal, social, technology and Global Components.

15. Doing an Internal Analysis The internal analysis, which provides important information about an organization’s specific resources and capabilities. An Organization’s resources are its assets include financial, physical, human and intangible that it use to develop, manufacture, and deliver product to customer.

16. Formulating Strategies As managers formulate strategies They should consider the realities of the external environment and their available resources and capabilities in order to design strategies that will help an organization achieve its goals.

17. Implementing Strategies Once strategies is formulated and the must be implemented. No Matter how effectively an organization has planned its strategies, performance will suffer if the strategies are not implement properly.

18. Evaluating Results The final step in the strategic management process is evaluating results. How effective have the strategies been at helping the organization reach its goals. After assessment management understand strategy is good or bad.

19. Components of a Mission Statement Customer Markets Concern for survival, growth, and profitability: financial Stability Philosophy: What are the firm basic belief, values. Product or services Technology

20. Components of a Mission Statement Self Concept: Major competitive advantage and core competencies. Concern for Employees: Are employee a valuable asset of the firm.

21. Types of Organization Sole Proprietorship organization Partnership Organization Joint Stock Organization (a) Private Limited Company (b) Public Limited Company

22. Sole Proprietorship Organization A single person own it. In this type of organization the individual owner supplies the capital needed to run the organization. He alone enjoys the profit and is responsible to pay all the losses or Liabilities.

23. Advantages/Disadvantages Availability of capital for investment is limited The proprietor acts strictly to his decisions Disadvantages: Limited amount of capital can be invested. In case of loss, investor has to bear it alone.

24. Partnership A partnership organization is one, which is formed by a group of persons with mutual understanding and confidence. The maximum number of shareholders is 20. Advantages:- Liabilities are divided Capital is much greater than in the sole proprietorship organization. Disadvantages:- The major disadvantage lies in the situation when the partners do not trust each other.

25. Joint Stock Companies These companies have limited liabilities. In this system the capital is contributed by a large number of persons. It is voluntary association of individuals for profit, have a capital share divided into transferable shares of different values. Each share has equal value. The person who purchase the share is called shareholders. The managing body known as Board of Directors is elected by these shareholders.

26. Advantages / Disadvantages Advantages: Liabilities are Limited Great potentials of expansion Good managing capabilities can be exercised Disadvantages: Large numbers of legal formalities are to be fulfilled Decision Taken is very difficult.

27. Private Limited Companies Two or more persons can form this type of company. The maximum number of membership is 50. The government does not interfere the working of the system.

28. Public Limited Company The public limited company authorized by after the approval of Governments. Check and balance.The public limited company is subjected to grater control and supervision of the Government, which is necessary protect the interest of the people's. The shares of these companies are offered in the stock exchange.

29. Types Of Share There are two types of shares (a) Common Shares (b)Preferred Shares

30. Common stocks Common Stocks: As the name suggests, t his type of stocks are quite common. It is the basic stock a corporation issues. Buying a common stock will give you an advantage of owning the equity in the company. It has varied dividends/ or returns. Not only this, as one of the shareholders in the company, you have your say in voting for the board members as well.

31. Preferred Stocks Preferred Stocks: These stocks are usually between Common stock and bond. These stocks represent some degree of ownership in a company but usually don’t come with the same voting rights. Each share of preferred stock is normally paid a guaranteed dividend which receives first priority over common stock holders in the event of liquidation. Preferred shareholders always receive their dividends first and, in the event the company goes bankrupt, preferred shareholders are paid off before the common stockholders.

32. Preferred Stocks Types The Preferred Stocks are further sub-divided into 4 categories: Cumulative Preferred Stocks: This is more of a savings stock. In the case of cumulative stocks, if for some reason the dividends cannot be paid out one year, it is added to the dividends the following year and paid out in one larger amount. Non-cumulative Preferred Stocks: In this case, the dividends skipped one year are not added to the following years’ dividends. Callable/ Participating Preferred Stocks: These shares may receive higher than normal dividend payments if the company turns a larger than expected profit. Convertible Preferred Stocks: This type gives you (stockholder) the right to convert your stocks into a fixed number of common stocks irrespective of market price.

33. Joint venture An association of two or more individuals or companies engaged in a business enterprise for profit without actual partnership or incorporation; also called a joint adventure.

34. Stock Exchange Definition: Organized and regulated financial market where securities (bonds, notes, shares) are bought and sold at prices governed by the forces of demand and supply. Stock exchanges basically serve as (1) primary markets where corporations, governments, municipalities, and other incorporated bodies can raise capital by channelingsavings of the investors into productive ventures; and (2) secondary markets where investors can sell their securities to other investors for cash. Organizedfinancialmarketsecuritiesbondsnotes sharesboughtpricesforcesdemand and supplyexchangesprimary marketscorporationsgovernmentsmunicipalitiescapitalchannelingsavingsinvestorssecondary marketssellcash

35. stock exchange all listed and trading parties. Trades in the older exchanges are conducted on the floor (called the 'trading floor') of the exchange itself, by shouting orders and instructions (called open outcry system). On modern exchanges, trades are conducted over telephone or online. Almost all exchanges are 'auction exchanges' where buyers enter competitive bids and sellers enter competitive orders through a trading day. Some European exchanges, however, use 'periodic auction' method in which round-robin calls are made once a trading day. The first stock exchange was opened in Amsterdam in 1602; the three largest exchanges in the world are (in the descending order) New York Stock Exchange (NYSE), London Stock Exchange (LSE), and the Tokyo Stock Exchange (TSE). Called also stock market.listedtradingpartiesTradesfloortrading floorordersinstructionsopentelephoneonlineauction buyerscompetitivebidssellersdaymethodNew York Stock Exchange (NYSE)London Stock Exchange (LSE)Tokyo Stock Exchange (TSE)stock market

36. Theory of Production Production theory is the study of production, or the economic process of converting inputs into outputs. Production uses resources to create a good or service that is suitable for use, gift-giving in a gift economy, or exchange in a market economy. This can include manufacturing, storing, shipping, and packaging. Some economists define production broadly as all economic activity other than consumption.Productionresourcesgoodservicegiftgift economyexchangemarket economymanufacturingshippingpackagingconsumption

37. Theory of Production They see every commercial activity other than the final purchase as some form of production. Production is a process, and as such it occurs through time and space. Because it is a flow concept, production is measured as a “rate of output per period of time”. There are three aspects to production processes.flow concept

38. Factor Of production DefinitionSave to FavoritesSee ExamplesSave to FavoritesSee Examples Resources required for generation of product Resourcesrequired or services, generally classified into four major groups: (1) Land (including all natural resources), (2) Labor (including all human resources), (3) Capital (including all man-made resources), and (4) Enterprise (which brings all the previous resources together for production).servicesclassifiedmajorgroupsLandallnatural resourcesLaborhuman resourcesCapitalEnterprisebringspreviousproduction These factors are classified also as management, machines, materials, and money (this, the 4 Ms), or other such nomenclature. More recently, knowledge has come to be recognized as distinct from labor, and as a factor of production in its own right.factorsmanagementmachinesmaterialsmoneynomenclatureknowledgefactor of productionitsown

39. Land Land including all natural resources. Land is a natural & primary factor of production. Land is not created by mankind but it is a gift of nature. So it is called as natural factor of production. Land mean surface of earth. On the surface (Agricultural land) Below the Surface (Mineral, resources, rocks, ground water etc) Above the surface (climate, rain, space monitoring etc)

40. Characteristics and Feature of Land Land is free gift of nature: Land is free gift of nature to mankind. It is not a man-mad factor but it is a natural factor. Land is primary factor of production: Land has perfectly inelastic supply: Fixed in quantity. Neithe it can be increased nor decreased. Simply, you can not change size of the earth. But from individual point of view, its supply is relatively elastic.

41. Characteristics and Feature of Land Land has site of Location Value. Land earns rent a reward for its use Land has no social cost :- Land is no created by society by putting any efforts and paying and price.

42. Labour What is Labour and Labourer ? Meaning ↓ Usually, the term 'Labour' is used for 'worker'. But, technically, it is not correct. Labour and Labourer (worker) are two different things. Labour is an ability to work. Labour is a broad concept because it includes both physical and mental labour (as per above picture). Labour is a primary or human factor of production. It indicates human resource. Labourer is a person who owns labour. So labourer means worker. It is a person engaged in some work.

43. Characteristics and Feature of Labour

44. Depreciation Depreciation is computed at the end of an accounting period (usually a year), using a method best suited to the particular asset. When applied to intangible assets, the preferred term is amortization.accounting periodusingmethodintangible assetsamortization 2. Commerce: The decline in the market value of an asset.Commercemarket value 3. Economics: The decrease in the economic potential of an asset over its productive or useful life.Economicsuseful life 4. Foreign exchange: The reduction in the exchange value of a currency, either by a government or due to weakening of the underlying economy in a floating exchange rateForeign exchange valuecurrencygovernmenteconomyfloating exchange rate

45. Depreciation de·pre·ci·a·tion noun1.decrease in value due to wear, decay, decline in price,etc. 2.such a decrease as allowed in computing the value of property for tax purposes. 3.a decrease in the purchasing or exchange value of mo ney. 4.a lowering in estimation.

46. Bank An establishment authorized by a government to accept deposits, pay interest, clear checks, make loans, act as an intermediary in financial transactions, and provide other financial services to its customers.establishmentgovernmentdepositspayinterestchecksloansactintermediaryfinancial transactionsprovidefinancial servicescustomers

47. Bank Definition of 'Bank' A financial institution licensed as a receiver of deposits. There are two types of banks: commercial/retail banks and investment banks. In most countries, banks are regulated by the national government or central bank.

48. Banking A company's financial dealings with an institution that provides business loans, credit, savings and checking accounts specifically for companies and not for individuals. Business banking is also known as commercial banking and occurs when a bank, or division of a bank, only deals with businesses. A bank that deals mainly with individuals is generally called a retail bank, while a bank that deals with capital markets is known as an investment bank.

49. Commercial Bank Definition of 'Commercial Bank' A financial institution that provides services, such as accepting deposits, giving business loans and auto loans, mortgage lending, and basic investment products like savings accounts and certificates of deposit. The traditional commercial bank is a brick and mortar institution with tellers, safe deposit boxes, vaults and ATMs. However, some commercial banks do not have any physical branches and require consumers to complete all transactions by phone or Internet. In exchange, they generally pay higher interest rates on investments and deposits, and charge lower fees

50. Characteristics / Features of a Bank Characteristics / Features of a Bank ↓ 1. Dealing in Money Bank is a financial institution which deals with other people's money i.e. money given by depositors. 2. Individual / Firm / Company A bank may be a person, firm or a company. A banking company means a company which is in the business of banking. 3. Acceptance of Deposit A bank accepts money from the people in the form of deposits which are usually repayable on demand or after the expiry of a fixed period. It gives safety to the deposits of its customers. It also acts as a custodian of funds of its customers. 4. Giving Advances A bank lends out money in the form of loans to those who require it for different purposes.

51. Characteristics / Features of a Bank ↓ 5. Payment and Withdrawal A bank provides easy payment and withdrawal facility to its customers in the form of cheques and drafts, It also brings bank money in circulation. This money is in the form of cheques, drafts, etc. 6. Agency and Utility Services A bank provides various banking facilities to its customers. They include general utility services and agency services. 7. Profit and Service Orientation A bank is a profit seeking institution having service oriented approach. 8. Ever increasing Functions Banking is an evolutionary concept. There is continuous expansion and diversification as regards the functions, services and activities of a

52. production The processes and methods used to transform tangible inputs (raw materials, semi- finished goods, subassemblies) and intangible inputs (ideas, information, knowledge)into goods or services. Resources are used inmethodstangibleraw materialssemi- finished goodssubassembliesintangibleideasinformationknowledgegoodsservices Resources this process to create an output that is suitable for use or has exchange value.processcreateoutputexchange value

53. Six Sigma Six Sigma is a management philosophy developed by Motorola that emphasizes setting extremely high objectives, collecting data, and analyzing results to a fine degree as a way to reduce defects in products and services. The Greek letter sigma is sometimes used to denote variation from a standard. The philosophy behind Six Sigma is that if you measure how many defects are in a process, you can figure out how to systematically eliminate them and get as close to perfection as possible. In order for a company to achieve Six Sigma, it cannot produce more than 3.4 defects per million opportunities, where an opportunity is defined as a chance for nonconformance.

54. Break- Even Analysis An analysis to determine the point at which revenue received equals the costs associated with receiving the revenue. Break-even analysis calculates what is known as a margin of safety, the amount that revenues exceed the break-even point. This is the amount that revenues can fall while still staying above the break-even point.

55. Break- Even Analysis A calculation of the approximate sales volume required to just cover costs, below which production would be unprofitable and above which it would be profitable. Break-even analysis focuses on the relationship between fixed cost, variable cost, and profit.calculationapproximatesales volumecovercostsprofitablefixed costvariable costprofit

56. Why Calculate the Breakeven Point? The breakeven point is an important reference point that enters into planning and carrying out business activities. By clearly understanding the level of sales needed to cover all costs, you know how many units you must produce, in the case of a manufacturing business, or how many units you need to purchase and sell, in the case of a merchandising business. In a services business, the breakeven point indicates the number of billable hours you must work in order to cover your cost

57. The Calculation At the breakeven point: revenue = fixed costs + variable costs. Therefore, in order to calculate the breakeven point, you need to determine all the fixed and variable costs involved in the operation. Fixed costs are those that are invariable, and that must be paid regardless of the level of sales. Variable costs are incurred in proportion to the level of sales.

58. monetary value Definition[Save to Favorites][See Examples][Save to Favorites][See Examples] The value or worth that a product or service would bring to someone if sold.valueworthproductservicebringsold

59. Monetary Value monetary value - the property of having material worth (often indicated by the amount of money something would bring if sold); "the fluctuating monetary value of gold and silver"; "he puts a high price on his services"; "he couldn't calculate the cost of the collection"

60. monetary value The amount of value an item or a service has in relation to if it were sold for cash to a willing buyer.amountvalueservicecashbuyer

61. Capital Budgeting Capital budgeting (or investment appraisal) is the planning process used to determine whether an organization's long term investments such as new machinery, replacement machinery, new plants, new products, and research development projects are worth pursuing. It is budget for major capital, or investment, expenditures. [1]investmentscapital [1]

62. Capital Budgeting A capital budget determines funding for assets that produce income, and you will have to make decisions about which assets to buy based on a clear set of objectives. Without these objectives, you have no way of knowing how much money you need to budget for capital expenditures. Your capital budget objectives work with your overall business plans to provide a strategic road map for your company's future.

63. Depreciation Defination A noncash expense that reduces the value of an asset as a result of wear and tear, age, or obsolescence. Most assets lose their value over time (in other words, they depreciate), and must be replaced once the end of their useful life is reached. There are several accounting methods that are used in order to write off an asset'sdepreciation cost over the period of its useful life. Because it is a non-cash expense, depreciation lowers the company's reported earnings while increasing free cash flow.expensereducesvalueresultwear and tearobsolescencelosedepreciateuseful lifeaccounting methodswrite offasset'scostperiodnon-cash expenselowerscompany'searningsfree cash flow 2. A decline in the value of a given currency in comparison with other currencies. For instance, if the U.S. dollar depreciates against the Euro, buyers would have to pay more dollars in order to obtain the original amount of euros before depreciation occurred.declinecomparisoncurrenciesagainstEurobuyersdollarsamount

64. Straight-line depreciation Straight-line depreciation is the simplest and most often used technique, in which the company estimates the "salvage value" of the asset after the length of time over which it is depreciated, and assumes the drop in the asset's value is in equal, constant yearly increments over that amount of time. The salvage value is an estimate of the value of the asset at the time it will be sold or disposed of; it may be zero

65. Activity depreciation Activity depreciation Activity depreciation methods are not based on time, but on a level of activity. This could be miles driven for a vehicle, or a cycle count for a machine. When the asset is acquired, we estimate its life in terms of this level of activity. Assume the vehicle above is estimated to go 50,000 miles in its lifetime. We calculate a per-mile depreciation rate: ($17,000 cost - $2,000 salvage) / 50,000 miles = $0.30 per mile. Each year, we then calculate the depreciation expense by multiplying the rate by the actual activity level.

66. corporation definition Firm that meets certain legal requirements to be recognized as having a legal existence, as an entity separate and distinct from its owners. Corporations are owned by their stockholders (shareholders) who share in profits and losses generated through the firm's operations, and have three distinct characteristics (1) Legal existence: a firm can (like a person) buy, sell, own, enter into a contract, and sue other personsand firms, and be sued by them. It can do good and be rewarded, and can commit offence and be punished. legalrequirementsentityownersstockholdersshareholdersprofitsoperationscharacteristicsbuysellcontractpersons

67. corporation definition (2) Limited liability: a firm and its owners are limited in their liability to the creditors and other obligors only up to the resources of the firm, unless the owners give personal- guaranties. (3) Continuity of existence: a firm can live beyond the life spans and capacity of its owners, because its ownership can be transferred through asale or gift of shares.Limited liabilitylimitedliabilitycreditorsobligorsresourcescapacityownershipsaleshares 2. Municipal authority of a town or city.authority 3. A very large, usually diversified, firm.

68. Corporation a : a group of merchants or traders united in a trade guild b : the municipal authorities of a town or city 2 : a body formed and authorized by law to act as a single person although constituted by one or more persons and legally endowed with various rights and duties including the capacity of succession 3 : an association of employers and employees in a basic industry or of members of a profession organized as an organ of political representation in a corporative statecorporative 4 : POTBELLY 1 POTBELLY See corporation defined for English-language learners » See corporation defined for kids »

69. Labour Problems Labour Problemswar-time industries slowing down Women pressured to stay at home so returning soldiers could have jobs Jobs were hard to find Many veterans of the war flooded the job market. Some industries had become very wealthy because of the war Now that the demand for production had decreased so did the need for people to work 2 InflationRising costs of goods and services and the cost of living During the war prices had increased greatly. Wages had also gone up but had not kept pace with rising prices. Between 1914 and 1919 the cost of living had doubled.

70. Labour Problems Unions and StrikesIn 1919 Low employment No unemployment insurance (EI) No workers compensation No pensions Many poor working conditions Laws favoured the employers

71. Labour Problems Thousands joined unions to fight for workers rights Many employers did not take these unions seriously In many cases the only way for workers to make their demands heard was to go on strike. Three easy ways out for employers. 1) injunction 2) strikebreakers (scabs) 3) strikers would be replaced and lose their jobs

72. What is Industrial Relations Industrial relations is the management of the relationship between employers and employees

73. Industrial Action Has a long history, with the first recorded strike taking place in ancient Egypt Industrial action is now a common sight in most democratic countries

74. Human Resources (HR) Employees are commonly referred to as human resources HR departments manage industrial relations in many firms

75. Trade Unions Unions support employee rights and help them negotiate for better pay and working conditions through collective bargaining.

76. Employer Associations Such organisations support employers in negotiations, lobby governments on their behalf and provide training on issues such as health and safety

77. Engineering Environment An engineering economy study is accomplished using a structured procedure and mathematical modeling techniques. The economics results are then used in a decision situation that involves two or more alternative and normally includes other engineering knowledge and input.

78. Engineering Economy Fundamentally, engineering economy involves formulating, estimating, and evaluating the economics outcomes when alternatives to accomplish a defined purpose are available. Another way to define purpose are available. Another way to define engineering economy is as a collection of mathematical techniques that simplify economics comparison.

79. Features / Characteristics of Labour Labour is a perishable factor Labour can not be stored. Once the labour is lost, it can not be made up. Unemployed workers can not store their labour for future employment. 1. Labour is inseparable from labourer Labour can not be separated from labourer. Worker sells their service and doesn't sell themselves.

80. Features / Characteristics of Labour Labour is a heterogeneous factor No two persons possess the same quality of labour. Skills and efficiency differs from person to person. So, some workers are more efficient than others in the same job. Labour is a human capital Society makes investment in labour in the forms of education, health, training, etc. This improves efficiency of labour. So, it is a human capital.

81. Features / Characteristics of Labour Labour has a derived demand Like other factors of production, labour has a derived / indirect demand. It contributes to production process. Labour is an active factor of production Other factors like land, capital are passive, but labour is an active factor of production. Being a human being, this factor has its own feelings, likes and dislikes, thinking power, etc.